The small uptick in wages of US workers, driven by the competition between businesses to find new employees, has set off shockwaves throughout corporate America. In recent days, top economic policy makers, Wall Street analysts and the media have warned that the biggest danger to the capitalist economy is not the Omicron variant, but a potential “wages push” by workers next year, which could upend the entire financial system.
At a press conference last week, Jerome Powell, the chairman of the US Federal Reserve, said nothing about the horrific loss of life during the pandemic, noting only that the Delta variant “had an effect of slowing down hiring” and “hurt the process of the global supply chains getting worked out.” Dismissing the dangers of the more infectious Omicron variant, he added, “I do think wave upon wave, people are learning to live with this.”
Federal Reserve Building on Constitution Avenue in Washington [Credit: AP Photo/J. Scott Applewhite, file] Powell’s remarks followed the meeting of the 12-member Federal Open Market Committee, which voted to carry out three quarter-point interest rate hikes in 2022 and begin tapering its asset purchases to address inflationary pressures in the US economy. The announcement was a reversal from their position nine months ago, when Fed officials indicated that there would be no rate increases until 2024.
Powell made clear that the Fed’s concern over inflation was not the impact that the 6.8 percent consumer price hike—the highest in four decades—is having on workers’ living standards. Instead, he said, wages had “risen briskly” in recent months, and it has become clear to the central bankers that increasing wages are “both larger in [their] effect on inflation and more persistent.”
Powell said the decisive factor behind the decision to raise interest rates was the October 29 Employment Cost Index (ECI) published by the Bureau of Labor Statistics, which, he said, showed a “very high” 5.7 percent rise in hourly labor costs over the last three months.
The Fed and various economic forecasters had originally thought rising wages would be temporary and transitory. They expected that the Biden administration’s cutoff of pandemic stimulus checks and extended unemployment benefits would be enough to force workers back into the labor market and relieve “inflationary pressures.”
But the effort to use economic pressure to force workers back into infected factories and workplaces had largely failed, Powell lamented. “The important metric that has been disappointing really has been labor force participation, of course, where we had widely thought, I had certainly thought that last fall as unemployment insurance ran out, as vaccinations increased, that schools reopened, that we would see a significant surge, if you will, or at least a surge in labor force participation.” While there had been “some improvement,” he said, “it feels likely now that the return to higher participation is going to take longer.”
He continued, “The ratio of job openings, for example, to vacancies is at all-time highs, quits—the wages, all those things are even hotter.” For “certain people,” he said, “they don’t want to go back in the labor force because either they’re medically vulnerable or they’re not comfortable going back while COVID is still everywhere. That’s one thing. The lack of availability of childcare made for caretakers is certainly part of it, not just for children, but for older people.”
While acknowledging “wages are not a big part of the high inflation story that we’re seeing,” Powell warned, “if you had something where real wages were persistently above productivity growth, that puts upward pressure on firms, and they raise prices… We don’t see that yet. But with the kind of hot labor market readings—wages we’re seeing, it’s something that we’re watching.”
“The labor market is by so many measures hotter than it ever ran in the last expansion,” Powell said. “You know, usually, in every other expansion, it’s that there aren’t enough jobs and people can’t find jobs,” he said, adding, “What we need is another long expansion, like the ones we have been having over the last 40 years.”
Despite a fall in the official jobless rate, another 4.2 million workers quit their jobs in October. As of November 2021, the labor-force participation rate of US adults aged 65 and over was 7.2 percent lower than in February 2020, while that of “prime age” adults aged 25 to 54 declined by 1.3 percent, according to Marketplace . As part of the so-called “Great Resignation,” around three million more workers have retired since the start of the pandemic than expected based on prior-year trends, according to estimates by the Federal Reserve Bank of St. Louis.
The “tight labor market” has provided workers—particularly the lowest-paid—with greater leverage to demand higher wages. According to the Atlanta Federal Reserve, the average wage increase for job switchers was 5.1 percent in October, measured as a three-month moving average of median wage growth, compared to 3.7 percent for those who remained at the same job.
Despite the dire warnings by the Fed, pay hikes have been extremely limited, and 70 percent of all workers have actually suffered a cut in real pay. The Bureau of Labor Statistics reported earlier this month that average hourly earnings for private-sector production and nonsupervisory employees rose by only 12 cents, to $26.40. All told over the past 12 months, average hourly earnings have only increased by 4.8 percent.
When inflation is factored in, real wages have gone down 1.9 percent over the past year, according to the BLS. From October to November, real average hourly earnings for all employees decreased 0.4 percent. Since the start of the pandemic in February 2020, real wages have declined roughly 1 percent, as Jason Furman, an economist and professor at Harvard University’s John F. Kennedy School of Government, told Fortune.
As far as wages outstripping workers’ productivity, the exact opposite has been the case for the last four decades. Since 1979, real wages for non-supervisory workers have increased by only 17 percent, while productivity has risen by 61.8 percent, or 3.5 times faster.
The repeated references by the mouthpieces of the financial oligarchy to the dangers of a “wage-price spiral” is a frightened reference to the explosive wave of strikes by workers in the 1970s to protect their living standards from ravages of inflation, driven by the global decline in the position of American capitalism. Between 1969 and 1979, there were 3,300 strikes involving more than 1,000 workers, or an average of 300 a year. This reached a high point of 424 strikes, involving a total of 1.8 million workers, in 1974, when the inflation rate hit 11 percent.
The American ruling class responded with the “Volcker shock” in 1979, when Fed chair Paul Volcker raised the prime rate to 21.5 percent, provoking the worst recession since the Great Depression and “wringing inflation” out of the economy through mass unemployment, union busting and deep wage cuts.
The economic “expansions” over the last four decades that Powell praises were based on a massive transfer of wealth from the working class to the super-rich. The run up on the stock market, which has far more to do with rising inflation than wages, has been fueled by the Fed’s policy of “quantitative easing,” i.e., the provision of virtually free money to financial speculators.
Between 2009 and 2020, with the full backing of the AFL-CIO trade unions, raises averaged 2.8 percent a year, barely staying ahead of a 1-2 percent annual inflation rate. This has continued since the pandemic. Non-union workers have seen their wages climb at a much faster rate than unionized workers, according to the BLS. In contract after contract, the unions have accepted wage increases well below the rate of inflation, further eroding workers’ living standards.
At the same time, the unions have kept workers on the job as the deadly SARS-CoV-2 virus has spread through factories, schools and other workplaces, costing the lives of thousands of educators, transit and health care workers and private sector workers in food processing, logistics, manufacturing and other industries. Employers, with the full backing of the unions, have responded to the labor shortage by imposing inhumane levels of overtime, undermining workers’ health and further exposing them to COVID-19.
This has been a major factor in the rank-and-file revolt against the corporatist unions and the wave of strikes this year, from Volvo Trucks and Frito-Lay to John Deere and Kellogg’s. Although these and other companies are making record profits, the ruling class is terrified that the growth of working-class resistance will bring down the entire financial house of cards built up through massive corporate debt—which has swelled by $1.3 trillion since the pandemic—and the inflation of stock market values.
The payoff of the $32 trillion in debt taken on by Fed and the world’s central banks requires the continued extraction of surplus value from the labor of the working class. This is what lies behind the criminal policies of keeping schools and non-essential businesses open as the pandemic rampages out of control.
The Fed’s proposed rate hikes are meant to be a preemptive attack against the supposed “inflationary” demands of workers even as the central banks policies have contributed to a $5.5 trillion surge in the wealth of the world’s billionaires during the pandemic. Working-class opposition in the US and throughout the world, however, is only in its initial phase. In the coming year, the mass struggles against the sacrifice of millions of lives to corporate profit will take an ever more explosive and consciously anti-capitalist form
Data: Joe Biden Imports Almost 1.5 Million Migrants in Eight Months John Moore/Getty 7:00
President Joe Biden’s government has inflated the foreign population in the United States to record levels by adding almost 1.5 million migrants in just eight months, according to census data reviewed by the Center for Immigration Studies (CIS).
The policy added roughly one legal or illegal migrant for every three Americans who enter the workforce during the same period.
The resulting inflow brings the official estimate of the foreign population up to 46.2 million . That percentage means that one-in-seven of the people living in the United States were born elsewhere.
The massive inflow will help Biden’s deputies and their business allies to re-inflate the bubble of cheap labor that has suppressed Americans’ wages and salaries since 1990.
That bubble burst in early 2020 when President Donald Trump shut the borders, froze multiple visa-worker programs, and reduced the foreign population by roughly 1.2 million.
That low-migration policy allowed many Americans to get wage raises and workplace benefits from employers who were used to a plentiful supply of cheap migrant labor.
A statement from the CIS reported :
There were a total of 46.2 million immigrants (legal and illegal) in the country in November 2021. This is the largest number of immigrants ever recorded in any government survey or census going back to 1850.
As a share of the total U.S. population, immigrants were 14.2 percent in November 2021 — the highest percentage in 111 years. The immigrant share of the population has tripled since 1970 and has come close to doubling since 1990.
The number of immigrants in the country grew by 1.5 million between November 2020 and November of this year after declining by 1.2 million between February and September 2020 as a result of Covid-19 restrictions.
“Since President Biden’s election, the total legal and illegal immigrant population has grown spectacularly,” said Steven Camarota, the research director at CIS. “The ongoing border surge, the ending of nearly all interior enforcement, and the ramping up of legal immigration are clearly showing up in the data,” he added.
About 500,000 of the extra migrants are job-seeking “got-aways” illegals who were allowed to sneak across the U.S. southern border by Biden’s pro-migration appointees at the Department of Homeland Security.
Another 500,000 migrants were invited in during the eight months up to October 1 under a variety of legal pretexts, such as requests for asylum or requests to reunify with family members in the United States. In contrast, Trump deputies admitted roughly 55,000 migrants before Biden’s February 20 takeover.
Biden’s deputies — chiefly, pro-migration zealot DHS secretary Alejandro Mayorkas — have also admitted many legal immigrants, plus at least 50,000 Afghans, plus many white-collar visa workers, and have also reduced deportations by roughly 90 percent.
The total number of arrivals recorded by border officials is greater than the census bureau’s estimated population increase.
The huge inflow of foreign workers, consumers, and renters will make it more difficult for ordinary Americans to earn good wages and to afford decent housing.
Breitbart reported December 20 on the pocketbook impact of the government’s immigration policy:
Hasit Patel is an Indian legal immigrant who operates the two-star La Quinta franchise budget hotel where [Monique] Rolle worked for roughly $8.50 an hour before she took her $15-an-hour job at Target.
Patel’s business plan depended on cheap migrant labor, according to what he told the Washington Post :
“[His] struggle to find [replacement] labor felt like a blow to his whole notion of what made America great. An immigrant from India, he believed that the health of the U.S. economy was protected by a constant refreshing of the workforce, an injection of striving immigrants willing to take on some of the unpleasant jobs that many Americans are loath to do — like cleaning [his] hotel rooms.”
Patel’s expectation was rational: From 1990 to 2017, the federal government inflated the labor force by adding roughly one migrant — both legal and illegal — for every three Americans who joined the workforce.
That economic policy of inflating the labor supply slowed in the 2008 crash and came to a sudden halt in 2020 when President Donald Trump closed the borders to slow the spread of the coronavirus. Overall, the federal government imported 5 million fewer foreigners from 2010 to 2020 — including 3 million fewer from 2017 to 2020 — compared to prior decades, according to recent reports.
The Post report continued:
“I can’t compete with the [$15-per-hour] warehouses for wages,” Patel said. “The government should let us get people from India, even just for six months. The government has to realize there are certain job categories that American people don’t want to do anymore.”
The Post did not explain how Patel would import temporary workers from caste-divided India, where half the workers earn less than $100 per week. But the B-1/B-2 visa is used by some Indians to legally visit for six months — and illegally work while they are in the United States.
So, without a supply of very cheap workers from his home country, Patel reluctantly raised Americans’ wages “from $8.50 to nearly $11 an hour and offered more flexible schedules,” the Post reported.
Meanwhile, the GOP leadership has focused criticism on the migrants who cross the southern border. and has largely refused to spotlight the pocketbook damage to Americans caused by the massive inflow of foreign workers, consumers, and renters.
Many polls show that labor migration is deeply unpopular because it damages ordinary Americans’ career opportunities, cuts their wages , and raises their rents .
Migration also curbs Americans’ productivity , shrinks their political clout , widens regional wealth gaps , radicalizes their democratic, compromise-promoting civic culture , and allows elites to ignore despairing Americans at the bottom of society .
For many years, a wide variety of polls has shown deep and broad opposition to labor migration and the inflow of temporary contract workers into jobs sought by young U.S. graduates. This opposition is multiracial , cross-sex , non-racist , class-based , bipartisan , rational , persistent , and recognizes the solidarity Americans owe to each other.
Gov. Abbott working to 'secure the sovereignty' of America with border wall
https://www.youtube.com/watch?v=V3MFaL2Rz9o
“Joe Biden is great on immigration. I guess depends on your perspective. If you’re a human trafficker, or drug dealer, or all those migrants wearing the Biden let us in shirts, you’d give him an A-plus, plus, but the American people would give him an F. The crisis we said our border was not only entirely predictable. It was predicted. I predicted it last fall that if you campaign all year long on open borders, amnesty, and health care for illegals, you’re going to get more migrants at the border. That’s exactly what’s happened every month since the election.” SEN. TOM COTTON
From April 2020 to April 2021, more than 100,000 Americans died from drug overdoses, according to data from the National Center for Health Statistics. An overwhelming majority of those deaths came from opioids, and fentanyl smuggling has surged at the southern border since the start of Joe Biden's presidency. Joseph Simonson and Collin Anderson
Officials in Mexico believe the tide of laundered money could be as high as $50bn per year, a sum equal to about three per cent of Mexico's legitimate economy -- more than all its oil exports or spending on key social programmes. Internationally, money laundering represents between two and five per cent of global GDP, or between $800bn and $2tn annually, according to the UNODC.
THE BIDEN KLEPTOCRACY
American people deserve to know what China was up to with Joe Biden , especially when Beijing had already shelled out millions of dollars to Biden family members — including millions in set-asides for “the big guy.” What else is on that infamous Hunter Biden laptop? The conflicted Biden Justice Department cannot be trusted to engage in any meaningful oversight on this issue. We need a special counsel now.
TOM FITTON - JUDICIAL WATCH
China is America's enemy but Joe Biden's friend
By J. Marsolo
The corrupt media know the truth about China paying the Bidens and about the China fentanyl smuggled through Mexico. In addition to the China virus and China fentanyl, China steals our technology and intellectual property that costs our country between $300 and 600 billion in losses per year. The FBI reported in February 2020 that China is the biggest law enforcement threat to the United States and that China was seeking to steal American technology by " any means necessary ."
The only thing tougher than moving illegal drugs
across borders is getting the profits back to
Mexico's cartels, U.S. officials said. Cash is heavy,
and transporting it exposes traffickers to lots of
risk. Putting it into the banking system is perilous,
too. The U.S. and Mexican financial systems have
been geared to detect dirty money.
Reuters reports that Chinese money brokers in Mexico have avoided the conflicts amongst the cartels themselves, and have (according to an unnamed DEA agent) "coordinat[ed] money contracts with both the Sinaloa and Jalisco New Generation cartels on the same day" — no mean feat.
EXCLUSIVE PHOTOS: 600 Migrants Enter West Texas Border Town in One Day
Breitbart Texas/Randy Clark 2:40
EAGLE PASS, Texas — Despite a law enforcement presence on both sides of the Rio Grande, a CBP source says more than 600 migrants were apprehended after entering the United States on Thursday.
The source says the arrests in Eagle Pass accounted for more than 50 percent of the apprehensions within the Del Rio Sector that day.
Breitbart Texas/Randy Clark
A rescue team in Mexico, “Grupo Beta,” patrolled the river periodically in an airboat as troops with the Mexican National Guard watched. The Mexican National Guard, known as “La Guardia Nacional,” had little apparent impact.
Breitbart Texas/Randy Clark
On the United States side of the Rio Grande, Border Patrol agents performed similar marine activities.
Texas National Guard troops standing along a makeshift wall of shipping containers watched over the river and took migrants into custody. Soldiers waited with family units until Border Patrol transports arrived.
Breitbart Texas/Randy Clark
One unaccompanied migrant child walked through a gap in the Texas border wall currently under construction. The wall is nearing completion, however, gates along roadways have yet to be installed. A Texas Department of Public Safety Highway Patrol trooper spotted the youth and turned the migrant over to Border Patrol.
In a revolving door fashion, Border Patrol agents made several trips to the Eagle Pass International Bridge to return mostly single adult migrants to Mexico under the CDC Title 42 Emergency COVID-19 order. The source says these scenarios are playing out daily and have challenged the agency’s ability to keep up with the constant flow.
Breitbart Texas/Randy Clark
The source says there are no “off days,” meaning the flow of migrants is constant. The source says the Rio Grande Valley still maintains a firm lead in overall apprehensions.
The migrant crossings are occurring in the downtown area and more remote ones around the city. The constant flow is creating a sense of frustration among residents by the lack of a coherent federal response.
Recently, nearly 200 migrants crossed the Rio Grande near Normandy, Texas, in one single event north of Eagle Pass. The larger groups are mostly Venezuelan, Cuban, and Nicaraguan migrants.
Randy Clark is a 32-year veteran of the United States Border Patrol. Prior to his retirement, he served as the Division Chief for Law Enforcement Operations, directing operations for nine Border Patrol Stations within the Del Rio, Texas, Sector. Follow him on Twitter @RandyClarkBBTX.
